Friday, October 15 marks the extension deadline for filing your 2020 Form 1040 Tax return. Given all the recent tax legislation, numerous stimulus checks and COVID-related tax changes, there are more open tax return filings than ever!
If you have not filed a tax return and don’t think you need to file one, please reconsider. Billions of refunds go unclaimed each year by taxpayers that really should file a tax return.
Here’s a quick checklist of situations when filing a tax return might make sense even if you don’t have to:
- You are due a refund. Without filing, the government could end up keeping these funds. So double check your stimulus check payments. Did you get them? Were they for the full amount? Preparing a tax return, even if not filed, is a good exercise to ensure you received the full benefit.
- You paid tax on unemployment benefits. With the federal government making up to $10,200 of these benefits tax-free, you may be due a nice refund.
- You had taxes withheld from your paychecks, but end up owing no tax for the year.
- You are eligible for Health Insurance Premium Credits. Be aware of this possible benefit if you use the market exchange to purchase your health care insurance.
- You are eligible for a refundable credit. This is true with the popular Earned Income Tax Credit, the Additional Child Tax Credit, and a portion of the American Opportunity Tax Credit.
- Your state requires a federally filed tax return.
- You want the filed tax return for your records.
- You wish to start your audit time clock. Remember the audit time-frame never starts if you do not file your tax return.
Many taxpayers have trouble gathering accurate and complete information necessary to file their tax return. When they cannot get all the necessary information, they get stuck. Should this be your situation, please ask for help. Even a reasonably close tax filing that is later amended when more information becomes available is sometimes a better alternative than not filing at all.